PlayStation 5 Sales Slip, Sony Lowers Fiscal Year Sales Estimate

As part of its quarterly earnings report, Sony said that it sold fewer PlayStation 5 video game consoles than expected, and it lowered its fiscal year PS5 sales estimate by 4 million units to 21 million. Sony also admitted that the PS5 is now entering the end of its viable lifecycle.

“PS5 hardware will enter its fifth year since launch, partially due to its entering the latter half of the console cycle,” Sony executives noted. “We aim to optimize sales with a greater emphasis on the balance with profits, so we anticipate a gradual decline in unit sales from next fiscal year onwards.”

Sony sold 8.2 million PS5s in the quarter, a record, bringing its fiscal year total to 16.4 million units and total lifetime sales of the console to about 58 million units. (Despite the math, Sony executives claimed only that “PS5 cumulative sales have exceeded 50 million units” during a post-earnings conference call.) The company previous expected to sell 25 million units in the fiscal year that ends March 31, but that number has been in doubt for months, and I pointed out in November that the PS5 would have to experience a record holiday quarter to even come close. But that didn’t happen, and Sony’s new estimate of 21 million suggest that the firm now expects to sell over 4.5 million units in the current quarter.

Sony reported a net income of $2.42 billion on revenues of $24.9 billion for the quarter ending December 31, and those figures represent gains of 13 percent and 22 percent, respectively. Its Games & Network Services contributed $9.6 billion of those revenues and delivered an operating income of $570 million. That latter figure was down a dramatic $200 million from the year-ago quarter because Sony spent heavily on promotions in an effort to hit its impossible unit sales target.

Despite the sales shortfall, the PlayStation ecosystem is in great shape, Sony says, with a record 123 million active accounts in the quarter, total game play time up 13 percent year-over-year (YOY), and 11 percent growth in PlayStation Plus revenues despite a slight YOY decrease in subscribers. Sony’s hit title Marvelʼs SpiderMan 2 has now sold over 10 million units (through this month) and Marvelʼs Spider-Man game series overall has now sold through over 50 million units including sales on PC.

Looking ahead to the next fiscal year, Sony sees a gradual decline in its PS5 hardware sales, a decrease in software sales with no major new franchise titles expected in the year, a slight decrease in first-party profits, and a gradual expansion of third-party software sales and network services revenues “due to a shift to attractive premium services.”

No matter what happens, the PS5 will go on to be Sony’s worst-selling consoles of all time. The PS4 sold roughly 120 million units, compared to 88 million units for the PS3, over 155 million units for PS2, and 102 million for the original PlayStation. Even the PlayStation Portable (PSP) sold about 76 million units.